House Bill 75 amends Louisiana Revised Statutes 27:44(15) and 205(16) to modify how gaming operators may deduct promotional play wagers from their reported net gaming proceeds and gross revenue. Currently, operators may deduct up to five million dollars annually in promotional play wagers. The bill replaces this fixed cap with a tiered percentage-based system that allows operators to deduct the greater of either five million dollars or a percentage cap calculated from the operator's taxable revenue. Beginning in 2027, the percentage cap is set at four percent of taxable revenue, increasing to seven percent in 2028, and reaching ten percent in 2029 and in all subsequent years.
Gaming operators, particularly casino licensees operating under both the net gaming proceeds and gross revenue frameworks, will experience expanded deduction allowances if their promotional play spending would otherwise exceed five million dollars annually. Operators with higher taxable revenues will benefit significantly from the percentage-based caps once those caps exceed the fixed five million dollar threshold. The tax treatment affects the amount of gaming revenue subject to state taxation and licensing fees, as promotional play wagers that exceed the allowable deduction will be counted toward taxable revenue. Smaller gaming operations may see limited impact if their promotional spending remains below the five million dollar floor, but larger operators could deduct substantially more under the new percentage-based system as it matures.
This legislation operates within Louisiana's comprehensive gaming regulatory scheme established in Chapter 27 of the Louisiana Revised Statutes, which governs casino gaming operations and requires state licensing through the Louisiana Gaming Control Board. The definition of net gaming proceeds and gross revenue are foundational to calculating taxable gaming revenue and the licensing fees owed to the state. By increasing allowable promotional play deductions, the bill effectively reduces the taxable base upon which state revenues are calculated, creating a trade-off between promoting competitive gaming offerings and state gaming tax revenue. The amendment applies uniformly to all licensed gaming operators subject to these definition provisions, making the change across-the-board rather than operator-specific.
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